Champion Iron related to a plan of arrangement
involving a third party acquiring all the outstanding common shares
of the company in exchange for shares of the third party. As is
customary, the applicant submitted a fairness opinion (which had
been included in the management proxy circular). While Justice
Brown approved the plan of arrangement, he placed no weight on the
fairness opinion, holding that for the fairness opinion to be
admissible, it needed to satisfy the applicable requirements
regarding the admissibility of expert evidence set out in the
Rules of Civil Procedure (the
"Rules"). The fairness opinion simply
contained the usual conclusory statement as to fairness and did not
include the "expert's reasons for his or her
opinion", as required by the Rules.
In Bear Lake, approval of a similar plan of arrangement
was before the court. Justice Wilton-Siegel did not share Justice
Brown's concerns in the context of an M&A transaction
involving the acquisition of securities of an issuer by a third
party. His Honour held that fairness opinions, while not expert
evidence, are relevant to courts in two respects. First, the
special committee or board of directors considered the fairness and
reasonableness of the proposed transaction objectively; and second,
the publication of the fairness opinion in the information circular
allowed the shareholders to reach their own conclusions regarding
both the integrity of the directors' recommendations and the
fairness of the transaction to them. As such, the absence of
shareholder objection may be relied upon as an implicit shareholder
endorsement of the directors' views on the fairness and
reasonableness of the transaction.
Justice Wilton-Siegel cautioned that when the plan of
arrangement is contested if a fairness opinion is to be qualified
as expert evidence, the detailed analysis that grounds the fairness
opinion must be available to securityholders.
In Royal, released one day after Bear Lake,
Justice Newbould stated that he agreed with Justice
There would appear to be a real divide among certain Commercial
List judges on this issue. Accordingly, until an appellate court
weighs in, caution must be exercised when dealing with court
approval of plans of arrangement, especially where there is a
dispute as to the fairness thereof.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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